Factors such as rising digitalization and increased spending capabilities have dramatically changed the meaning of customer experience. Product features and prices are no longer the primary consideration in the digital age, as customer experience is becoming the primary differentiating factor. Customers expect brand owners to provide a personalized experience across touchpoints and interaction channels, ensuring a seamless digital commerce experience. According to multiple studies conducted by Quadrant, customers are ready to pay a premium price for better and personalized services. The retailers and brand owners focusing on delivering exceptional and personalized customer experiences are increasingly becoming more profitable and are winning over the competition. A customer-centric approach helps organizations drive improvements in customer loyalty, brand image, messaging consistency, and revenue growth.
The majority of retailers have transformed their digital commerce and CX-specific technology landscape by adopting cloud-based applications and services. However, traditionally architected cloud-based applications lack the necessary agility, speed, and performance required to adapt to the growing business complexities, demanding customers, and ever-increasing competition. In a fast-paced digital-savvy economy, retailers are required to transform their digital commerce operations to drive a culture of innovation and gain the necessary business agility to ensure long-term and sustainable success. Therefore, cloud-native architecture is increasingly becoming the current industry norm, enabling organizations to future-proof their technology investment and drive a culture of continuous improvements.
Cloud-native is an approach to designing and building applications based on microservices-based architecture running on containers and dynamic orchestration platforms. Unlike traditional monolithic architecture, cloud-native applications are automatically optimized for optimum performance across any cloud environment with container infrastructure, including private, public, on-premises, hybrid clouds, or edge locations. The cloud-native approach follows agile development and DevOps principles, supporting continuous integrations and continuous delivery (CI/CD) along with continuous deployment. The applications are designed, developed, and delivered collaboratively by development, IT operation, testing, security, and other teams.
According to Quadrant Knowledge Solutions’ research findings, cloud-native digital commerce applications offer a significant advantage over traditional multi-tenant SaaS applications. Cloud-native architecture helps organizations create a culture of innovation with customer-centricity at its core. With benefits such as significantly shorter time-to-market, lower cost-to-market, improved deployment frequency, operational efficiency, and much lower failure rate, cloud-native applications are increasingly becoming the industry norms, helping organizations succeed in today’s dynamic digital commerce environments.
Some of the primary value propositions of cloud-native architecture on building a customer-centric organization include:
- Competitive Advantage with Customer-Centricity: Organizations lacking a robust, customer-centric business model often face challenges sustaining their businesses. Building a customer-centric business model requires a culture of innovation that promotes continuous improvements and constant updates to adapt to dynamic business requirements and achieve delightful customer experiences consistently. Retailers adopting cloud-native architecture are well-positioned to make ongoing improvements and updates to their digital commerce platforms for meeting the demands of constantly evolving customer requirements. Unlike traditionally architected multi-tenant SaaS applications, cloud-native applications enable retailers to build customer-centric business models to maintain an edge over their competitors. A robust cloud-native architecture offers a long-lasting competitive advantage with continuous improvements around various mobile-first applications, including eCommerce, customer servicing, loyalty programs, digital marketing, in-store experience, customer intelligence, campaign management, and others.
- Ability to Introduce New Services and Business Models: Cloud-native technologies support organizations in accelerating innovation while enabling them to launch a variety of application services ranging from a simple database to more complex advanced analytics, machine learning, streaming analytics, and such others. It allows retailers to achieve a faster pace of innovation in introducing new applications and features while extending the value of existing applications to drive growth. With a significantly reduced time-to-market, the cloud-native approach allows retailers to quickly introduce new services and adopt new business models to significantly improve the customer experience for long-term customer loyalty.
- Transforming CX with Open APIs: A robust CX strategy requires retailers to improve their presence across omnichannel touchpoints, collect contextual customer information, understand customer journeys, and improve engagement with personalized strategies. A robust digital commerce platform must offer seamless integration and interoperability with various digital experience tools to help retailers gain contextual customer intelligence and personalize their CX strategies for each customer. Cloud-native architecture offers open APIs for agile integrations and a seamless, interoperable experience between various applications. It allows organizations to effectively manage partners, customers, and their different business streams through open APIs to accelerate service delivery and improve overall CX transformation initiatives. Additionally, it allows organizations build mobile-first applications and easy-to-use UI/UX to enhance both CX and user experience.
- Agility and On-Demand Scalability: The cloud-native applications are designed for cost-effective, enterprise-grade scalability and agility. Organizations can build, deploy, and operate cloud-native applications in a container platform across public, private, and on-premises environments. Unlike the traditional approach to build applications for peak scaling capacity with vertical scaling, cloud-native applications support horizontal scaling allowing organizations to scale up and down on-demand. In this way, retailers can prepare their digital commerce platform for optimum performance during peak seasons like Black Friday sales and accommodate other seasonal variations in a highly cost-effective manner. With enhanced control over configurability and customization, cloud-native digital commerce applications offer enhanced business agility enabling retailers to respond to dynamic market and competitive scenarios.
Quadrant’s Perspective on Cloud-Native Digital Commerce Applications:
Accelerated by the COVID-19 pandemic, the popularity of digital commerce reached a new height and is expected to gain momentum even more in the future. With the new normal scenarios contributing to complex business dynamics, organizations across industry verticals and geographical regions are expected to undergo a major course correction. Organizations with traditional business practices are going to face challenges in retaining their market position and driving growth. In comparison, organizations with business models incorporating a culture of innovation and customer-centricity are expected to emerge as leaders.
Traditional multi-tenant SaaS applications have served their purpose in helping retailers digitally transform their commerce operations to drive growth. However, traditionally architected cloud applications are technologically not equipped to handle the current dynamic customers, business environment, and competitive scenarios. In the digital age, omnichannel presence, consistent experience across channels, personalized shopping experience, and ease of use are expected to remain at the forefront of driving customer-centricity.
The Last Word
Businesses must prepare for the next level of business agility, speed, and performance to continually adapt their strategies to win over the competition with customer-centric business models. Businesses must audit and evaluate their digital commerce platforms and associated technology stack and move towards cloud-native architecture to future-proof their investments. While cloud-native is not the only answer to being customer-centric, it enables organizations to build a solid foundation for customer-centricity. The future of digital commerce solutions is cloud-native; organizations must evaluate their digital commerce strategy and transform their technology stake with cloud-native architecture.
In this three-part blog series on cloud-native application, the next two blogs will cover Quadrant’s review about HCL SoFy, the cloud-native solution factory, and HCL Now, a cloud-native-as-a-service solution.